Russia Yields Tumble Most in Emerging Markets on Oil, Euroclear

Jan. 10 (Bloomberg) -- Yields on Russia’s local-currency
bonds fell the most among developing nations and the ruble
strengthened versus the dollar as oil climbed and investors bet
the government will ease access to the debt market this quarter.

The yield on Russia’s generic 10-year ruble-denominated
notes tumbled 26 basis points, or 0.26 percentage point, to 6.58
percent, the lowest level since 2008, data compiled by Bloomberg
show. The drop was almost 10 times their average 90-day move and
the most of 21 emerging markets. The ruble added 0.6 percent to
30.1910 per dollar by 11:50 p.m. in Moscow, after yesterday’s
0.5 percent decline.

Oil, Russia’s biggest export earner, surged as much as 1.7
percent to $94.70 a barrel in New York after data showed China’s
exports rose more than forecast in December, stoking confidence
that global demand is stabilizing. Ruble bonds outperformed
peers in Brazil, India and China last quarter after President
Vladimir Putin signaled the domestic market will open in 2013
for direct settlement for foreigners via systems including
Euroclear Bank SA and Clearstream International SA.

Bets the market will be opened up this quarter “are
keeping it hot,” Dmitry Dudkin, head of fixed-income analysis
at UralSib Financial Corp. in Moscow, said by phone. “Oil is
climbing, which is helping the ruble strengthen.”

Trading, Interventions

Russia’s currency slid 0.9 percent to 40.0200 per euro and
weakened 0.2 percent to 34.6141 versus the central bank’s
dollar-euro basket, which it uses to manage swings in the ruble
that can limit exporter competitiveness.

While the ruble’s trading hours were extended to 11:50 p.m.
Jan. 9, policy makers won’t buy and sell foreign currency to
influence its movements beyond 7 p.m., according to an e-mailed
statement from Bank Rossii yesterday.

The central bank said it bought 5.15 billion rubles ($170
million) of foreign currency for settlement Jan. 9, according to
a statement today. The regulator didn’t intervene in the local
market in December as it shifts to targeting inflation instead
of the ruble exchange rate.